Students paying bigger share of public college costs

By Adrienne Lu

Stateline.org (MCT)

Published: Monday, May 19 2014 8:16 p.m. MDT

Since the Great Recession ended, states have been struggling to control tuition costs with a patchwork of tuition freezes, more student aid and additional state funds.

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WASHINGTON — Once public university tuition goes up, it rarely, if ever, goes down.

Since the Great Recession ended, states have been struggling to control tuition costs with a patchwork of tuition freezes, more student aid and additional state funds.

Caught in the middle are students and their families, who have had to pick up a growing proportion of the cost of college by paying higher tuition. Average tuition and fees at public four-year colleges grew from $7,008 to $8,893, or 27 percent, from 2008-09 to 2013-14, according to a study by the College Board.

State and local funding for public colleges and universities is finally on the rise again in many states, after hitting bottom in fiscal year 2012. States appropriated 5.7 percent more to higher education in fiscal 2014 compared with the previous year, ranging from an increase of 27.3 percent in New Hampshire to a cut of 8.1 percent in Wyoming.

Despite the recent upswing, however, states are still spending an average of 23 percent less per student on higher education than they did when the recession hit at the end of 2007, according to the Center on Budget and Policy and Priorities.

In fiscal 1988, public higher education institutions received about 24 percent of their educational revenue from tuition, according to the nonprofit State Higher Education Executive Officers (SHEEO). Since then, the proportion has grown most years, reaching a high of 47 percent in fiscal 2013.

Another way to look at the shift: In fiscal 1988, the average tuition at a public institution was more than what the state spent per student in only two states, New Hampshire and Vermont, according to CBPP. In fiscal 2013, tuitions exceeded state funding per student in 23 states.

“There essentially has been a cost shift over the years in who pays for higher education going from states to students and families,” said Daniel J. Hurley, associate vice president for government relations and state policy for the American Association of State Colleges and Universities.

The implications of rising tuition at public institutions are significant, particularly for students from low-income families, at a time when there is growing recognition that a postsecondary education is essential in today’s economy.

In response, states are trying a variety of tactics to help students afford college, including increasing financial aid and offering institutions funding increases in exchange for promises to freeze tuition or keep increases to a minimum.

Another growing trend is performance funding, in which states direct some of their aid to colleges and universities based on their achieving key targets, such as helping students graduate on time.

“States are looking around at ways to reduce the burden on students of getting degrees without increasing the burden on the states,” said George Pernsteiner, president of SHEEO. “That will continue as a trend for a while. The real challenge, I think, for colleges and universities, is (finding) a way to reduce the cost of a degree.”

State aid to public education is always a prime target when state lawmakers need to balance their budgets, because they figure colleges have the option of charging higher tuition, Pernsteiner said.

While tuition increases may slow after a recession has ended, as they have in recent years, tuitions almost never decrease, in part because state funding for higher education never quite recovers to where it was before a recession. From 2001 to 2011, for example, the proportion of state and local tax revenues going to higher education dipped from 7.3 percent to 6.5 percent, according to SHEEO.

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